Online poker shutdown, week 2: The legal case, and status of player funds
It’s been two weeks since the U.S. Department of Justice kicked the world’s biggest online poker sites out of the United States market. A lot’s happened since then, but not much is known for sure about what the U.S. authorities plan for the future.
As yesterday’s Casino Affiliate Programs Webinar highlighted, even online gaming legal experts I. Nelson Rose and Lawrence Walters are uncertain of where the industry can go from here, and what the exact legal implications are for those who continue to offer online poker in the U.S.
Making the legal case
Many questions remain: Are the arrests an effort to scare the online gaming community? Or do the feds really have a solid case?
They better, according to some observers.
“It’s a good thing there are serious allegations,” writes David Stout at MainJustice.com, a legal site that describes itself as “anti-corruption”. “Otherwise, some smart alecks might bring up the unpleasant fact that, while government discourages some forms of gambling, it sponsors other kinds, like state lotteries that raise money while protecting politicians from having to raise taxes.”
Of course, the government’s hypocrisy regarding gambling doesn’t seem to affect their zeal for targeting online gaming companies, so that may not be an angle that holds any legal water.
But the bank fraud case does seem to hold water: According to legal experts, the poker companies “have safely done business, although at greater cost and hassle,” explains Liz Benston at the Las Vegas Sun. “Instead, they chose expediency over legality and integrity by using banks and other go-betweens in the United States to process payments amid a federal crackdown on Internet poker.”
Benston writes that, while the affected poker sites may be ready for a legal showdown with U.S. authorities, “federal prosecutors, long silent on their legal strategy, may not have shown their best cards.”
Looking to the future
At any rate, the three targeted companies — PokerStars, Full Tilt Poker, and CEREUS, the operator of UB.com and Absolute Poker — as well as analysts involved with these companies are starting to make more comprehensive statements regarding what’s going on, how it’s affecting their sites, and what they expect the future to hold.
Earlier this week, PokerStars stated that it is ready and able to return player funds. The industry waits for similar announcements from the other afflicted sites.
“PokerStars is a very innovative and forward thinking company operating in one of the most reputable e-gaming domiciles – the Isle of Man,” online marketing guru Mark McGuinness told the Isle of Man Today.
“Yes, there may be some short to long term impact, but since the passage of the Unlawful Internet Enforcement Gaming Act (UIEGA) act in 2006, PokerStars business has made strong inroads into the ever growing poker market in Europe, of which some analysts report has more longer term growth prospects than the North American market.
“Despite this latest incident there is a positive if not encouraging outlook for e-gaming – and the game is certainly not lost for the increasingly popular poker sites,” McGuinness concludes.
Absolute Poker / UB.com
Absolute Poker and UB have announced that they’ve retained Blank Rome LLP as counsel in the U.S. case. In a recent statement, the company explained why it, unlike Full Tilt Poker and PokerStars, has not agreed to let the U.S. Department of Justice use its .com domain name to let players withdraw their funds.
“At this time, Absolute Poker’s top priority is, and must be, the refund of balances to its and UB’s US players,” the company stated in a blog post. “However, given the far-reaching consequences of the US Attorney’s actions for Absolute Poker and for the entire poker community, Absolute Poker believes that the responsible course of action is to review with its attorneys the relevant court filings before taking any action.”
Full Tilt is also expected to announce that player funds are ready for withdrawal, although it hasn’t yet done so. The company “has been sending out messages to affiliates to remind them that while it is still being stopped from facilitating real money play, deposits or withdrawals from US-based players, it can promise that all player accounts remain safe and secure, and that its technical and legal teams ‘are working diligently to resolve any outstanding bottlenecks’,” notes OnlineCasinoReports.com.